REAL ESTATE BUYING TIPS
Working with a Professional
What are the advantages of using a
real estate professional to help me buy a home?
Buying a home is certainly one of the most rewarding
experiences most of us ever have; it's also one of
the most challenging. If you're buying for the first
time, the process may seem overwhelming. And even if
you've been through it several times, every move is
different and presents new challenges.
One clear advantage of enlisting the help of a sales
professional is simply that you don't have to go
through it alone. A good sales professional has the
background and skills to help you through each step
of the process, and make the experience of finding,
buying and moving into your new home as smooth,
quick and enjoyable as it can be. Another advantage
is that a sales professional represents a valuable
source of information about market trends;
communities and neighborhoods; and especially homes
for sale throughout the area. Remember, not every
home seller runs an ad in the local paper or puts a
sign up in the yard. In fact, many homes actually
sell before there is ever a need to advertise them.
The market expertise a sales professional offers you
is augmented by access to complete, regularly
updated information about every home listed by area
sales professionals through the Multiple Listing
Service (MLS). As you'll see in the following
questions, such professional expertise and services
can be of considerable help throughout the buying
process.
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Starting the Buying Process
Where do I begin the process of
looking for a home?
The first thing you should do is to begin focusing
on what you're looking for in a home. You can start
by establishing priorities in the following three
areas:
Location: Are you relocating to our community and looking for
the perfect year-round home? Or, are you interested
in purchasing a second home for you own personal
use? Many of our buyers purchase investment
properties, and are looking for strong cash flows
and appreciation information. Do you prefer a
location close to the water, to shopping, to schools
or recreational activities?
Personal Tastes: How large of a home do you need? Is the lot
size and location important to you? What other
features or amenities do you consider to be of high
importance?
Budget: How much home can you comfortably afford?
As you consider these issues, do a little research
of your own. Drive through neighborhoods that appeal
to you to see what's available. Read the local real
estate home magazines and listings in the newspaper
to learn about current prices in the areas you're
considering. The more knowledgeable you become, the
better your final decision is likely to be.
Then sit down and consider carefully all the things
you're looking for in a home. The Homebuyer's Wish
List worksheet later in this section is a good
starting point. When you've filled it out, you'll
begin to get a good idea of what you'd like your
dream home to be.
How do I find the right sales professional to work with?
The key word here is "right." While there's
certainly no shortage of qualified sales
professionals to choose from, it's important that
you find one who can fully understand your wants,
needs and individual tastes, and whose personal and
professional judgment you respect.
Today's buyers also have more choices when it comes
to choosing the sales professional who can best
represent them in a real estate transaction. Until
recent years, virtually all real estate
professionals involved in a given transaction worked
for the seller. However, a growing number of today's
home buyers are choosing to be represented by a
"buyer's agent," who represents the buyer in
contrast to the traditional seller/sales
professional relationship.
Many real estate companies throughout the United
States have both buyer and seller agencies. A sales
professional should present you with a disclosure
statement before any working relationship is
created. That statement should explain what a
buyer's agent is and does, what a seller's agent is
and does, and what dual agency means. It is very
important to remember that real estate firms are
governed by laws that can vary by state. Disclosure
laws also vary by state.
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Renting vs. Buying
How does buying compare to renting?
Renting offers a lifestyle that's nearly
maintenance-free. That may appeal to you, but
consider that renting offers you no equity, no tax
benefit, and most likely no protection against
regular rent increases.
If your rent has averaged $700 a month for the last
10 years, you've spent $84,000 with nothing to show
for it. Isn't it time you invested in yourself
instead of your landlord?
Several financing options hold special advantages
for first-time buyers or families with limited cash
reserves. FHA-insured and VA-guaranteed mortgages
can minimize or even eliminate your down payment.
You may also consider a lease-purchase agreement, or
borrow cash for a down payment from life insurance,
profit-sharing or a retirement account.
In addition to tax deductions you'll likely receive
that can partially offset the cost of real estate
taxes, insurance and home maintenance, your home may
appreciate in value. If you purchase a home that
costs $500,000 and the property increases in value
only five to ten percent each year, which is
conservative for the Outer Banks, your potential
appreciation in just two years would be between
$55,000 and $105,000!
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Choosing a Community
What should I think about when I'm
deciding which community I want to live in?
A track record of sound development and good
planning, location of recreational activities,
proximity to water , nice parks and playground
facilities, convenient to schools and shopping -
these are just a few considerations that are
important to many people when they choose a
community in which to live.
As for individual neighborhoods within a village or
city, there is no better source of information than
your real estate professional. Sales professionals
know the people and the communities they serve, and
chances are they can help you find a neighborhood
that really fits your family's needs.
How can I find out what homes are selling for in a given
neighborhood?
In most areas, home sales are a matter of public
record - you can get all the information you want
about recent sales, including prices and listing
times, by calling the county Recorder of Deeds.
An easier way is to ask your real estate
professional. If you're interested in a particular
home, a sales professional may be able to provide
you with a list of comparables - sale prices of
homes in your area that are roughly the same size
and age as the home you're considering. Although
there will certainly be some differences between the
homes - the house next door may have an extra
bedroom, or the one down the block may be older than
the one you're looking at - it's a good basis for
evaluating the seller's asking price.
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Property Taxes
How can I find out what my property
tax bill will be?
Usually, the total amount of the previous year's
property taxes is included on the listing
information sheet for the home you're interested in.
If not, ask to see the seller's receipt.
Remember, tax rates change from year to year, so the
previous year's bill should be considered simply as
a "ballpark" figure of what you would pay. For a
more precise projection, call the local assessor's
office for assistance, or ask your real estate
professional.
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Understanding Listings
If I'm moving a considerable
distance, is there any way I can screen homes before
I start traveling?
Yes. Today's Multiple Listing Services (MLS) - which
include as much as 90 percent of the homes listed in
any given community - have made it relatively easy
for buyers to access detailed information on homes
for sale practically anywhere in the country.
ERA Real Estate has taken the MLS concept into the
next generation with ERA.com, our parent Web site,
which features over 50,000 domestic listings, is a
powerful way for buyers to find the perfect home.
The site also includes ERAŽ International listings,
allowing interested buyers to expand their search to
other countries without ever leaving their home.
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Home Hunting Tips
When I start visiting homes, what
should I be looking for the first time through?
The house you ultimately choose to call home will
play a major role in your family's life. A home can
be an excellent investment, but more importantly, it
should fit the way you live, with spaces and
features that appeal to everyone in the family.
As you look at each home, consider these important
factors:
• Is there enough room for you now and in the
near future?
• Is the home's floor plan right for your
family?
• Is there enough storage space?
• Will you have to replace the appliances?
• Is the yard the size that you want?
• Are there enough bathrooms?
• How much maintenance and/or decorating will
you need to do right away? Later?
• Will your present furniture work in this
home?
How many bedrooms should I be considering?
Whether you are married or not, or have kids or not,
spare bedrooms come in handy when family and friends
come to stay. And when you're not having guests,
extra rooms are useful as a library, den, or TV
room.
Another good reason to choose a home with extra
bedrooms: extra space will make your home more
appealing to a larger number of interested buyers
when it comes time to sell.
Is an older home as good a value as a new home?
It's a matter of personal preference. Both new and
older homes offer distinct advantages, depending
upon your unique tastes and lifestyle.
New homes generally have more space in the rooms
where today's families do their living, like a
family room or activity area. They're usually easier
to maintain, too.
However, many homes built years ago offer more total
space for the money, as well as larger yards. Taxes
on some older homes may also be lower.
Some people are charmed by the elegance of an older
home, but shy away because they're concerned about
potential maintenance costs. Consider a home
warranty to get the peace of mind you deserve. The
ERA Home Protection Plan protects you against
unexpected repairs on many home systems and
appliances for a full year or more after you move
in.
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Making an Offer
When I've found the home I like, how
do I make an offer?
When you've found a special house you want to call
home, you'll probably feel excited and a bit
nervous. Let the sales professional know you're
ready to write an "offer to purchase" - a written
document that declares how much you are willing to
pay for the home provided that certain conditions
are met.
This is the time when it is most important for you
to keep in mind that, unless you have specifically
retained the services of a buyer's agent, the sales
professional is working for the seller. As the legal
agent of the seller, he or she is obligated to help
the seller get the best price, and will report to
the seller any confidence you share.
It's best to make your offer without sharing with
the agent your willingness to offer any higher price
if the seller does not accept your offer.
Your offer should have a time limit for the seller
to accept it, reject it, or make a counter-offer. If
a counter-offer is made, you will have some time to
respond. Often, several offers go back and forth
until an offer is accepted, or one party decides to
end negotiations.
How do I determine the amount of my initial offer?
There is really no rule to use in calculating an
initial offer. Naturally, the buyer wants the best
value and the seller want the best price, but
negotiations can be influenced by many factors, such
as a seller who may be changing jobs and wants to
sell quickly, or a buyer who is set on a specific
home.
After you've looked at the home's features, asked
questions, checked comparables, and talked about it
with your sales professional, you should have a good
idea of what the home's value is in the current
market. Consider what you can afford, and make an
offer that you consider to be fair.
Most buyers and sellers negotiate on price, with
both sides "giving" a little until both agree.
At that point, you typically will begin the process
of arranging for an inspection and applying for a
mortgage.
What is "earnest money" and how much do I need?
When you sign an offer to purchase, your sales
professional will ask you for " earnest money." This
refers to a monetary commitment that shows you are
serious about wanting to buy. Usually, you will be
asked to write a check for one to 10 percent of the
sale price.
This money will be held in a special escrow account.
If your offer is accepted, your earnest money will
be included as part of your down payment. If your
offer is not accepted, you'll get back all your
earnest money. But keep in mind that if you back
out, you may forfeit the full amount.
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REAL ESTATE SELLING TIPS
For Sale By Owner (FSBO)
Can I sell my house myself?
Many people believe they can save a considerable
amount of money by selling on their own. They look
at the average commission on a house and remember
stories of friends or relatives who managed to get
through the process with seemingly little trouble.
"Other people have sold their own homes," they say -
"so why can't I?"
Approximately 10 percent of American homeowners
handle their own sales. But in order to do this,
you'll need to realistically assess exactly what's
involved. The routine parts of the job involve
pricing your house accurately, determining whether
or not a buyer is qualified, creating and paying for
your own advertising, familiarizing yourself with
enough basic real estate regulations to understand
(and possibly even prepare) a real estate contract,
and coordinating the details of a closing. These are
serious responsibilities to take on, and they
include the concerns that your house is only on the
market when you're home, your marketplace is limited
to those you can reach locally, and a mistake may
cost you the money you're trying to save.
The best reason for working with a real estate
broker is the enormous amount of information they
have at their disposal - information that can help
make your house sell faster and easier.
Professionals know about market trends, houses in
your neighborhood, and the people most likely to buy
in such neighborhoods. They also know how to reach
the largest number of people who may be interested
in your house (both through old-fashioned sales
skill and the Internet resources of a reputable real
estate company), and are trained in areas like
screening potential buyers and negotiating with
them. Finally, they're always "on-call," and willing
to do the things most of us don't: working on the
weekends and answering the phone at all hours.
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Market Condition
What makes a house sell?
A successful sale requires that you concentrate on
six considerations: your sale price, your terms of
sale, the condition of your house, its location, its
accessibility, and the extent of marketing exposure
your house receives. While some of these factors are
beyond your control (such as the actual sale price),
you can compensate by taking advantage of others
(like a new paint job) to make your property as
attractive to prospective buyers as possible.
When is the best time to list a house for sale?
The "best" time to list your house is actually as
soon as you decide to sell it.
If you want to get the best price for your house,
the key is to give yourself as much time as possible
to sell it. More time means more potential buyers
will probably see the house. This should result in
more offers; it also gives you time to consider more
options if the market is slow or initial interest is
low.
Is there any seasonality to the market?
Peak selling seasons vary in different areas of the
country, but the Outer Banks is unique in that we
seem to have steady interest in our properties year
round. For example, late summer and early fall is
one of our prime listing seasons due to the end of
the vacation rental season. With renters leaving the
area, the accessibility to show our listed
properties to prospective buyers increases.
We also have an increase in prospective buyers
during the summer months, with vacationers arriving
from near and far. After spending a week on two
vacationing here, they will often investigate the
viability of owning property in our resort
community. Many prospective buyers will look at
properties during their vacation, and others elect
to return in the Fall or Winter months to view
properties and make their final decision.
What about market conditions - price trends, interest rates, and
the economy in general? Should they have any bearing
on when I list?
Probably not. Even if you're under no pressure to
sell, waiting for better market conditions is not
likely to increase your profit potential.
If you want to get the best price for your house,
the key is to give yourself as much time as possible
to sell it. More time means more potential buyers
will probably see the house. This should result in
more offers; it also gives you time to consider more
options if the market is slow or initial interest is
low.
How long should it take to sell?
Average listing times vary from 30 to 180 days, with
the average days on market for the Outer Banks for
2003 at 131 days and for 2004 at 134 days. Selling
in any market is easier if you keep time on your
side. Most professionals will tell you that allowing
yourself at least six months will put you in a
position to get a better return from their marketing
efforts.
What if I can't sell my old house before I have to move?
This situation can arise for any number of reasons.
For instance, getting the job promotion you've been
waiting for may mean having to relocate very
quickly. Another example: you finally find your
"dream home," and need to get it under contract
before it sells to another buyer. Whatever the
reason, don't panic. You have some viable
alternatives to the worrisome possibility of double
mortgage payments.
If you don't have to sell in order to buy a new
home, consider the advantages and disadvantages of
renting your old house. If you're being transferred
before you've had a chance to decide on the new
house, you may be able to obtain a short-term rental
of your own while you're becoming familiar with the
new area. Either way, a local real estate
professional can usually help, by advising you how
much you can expect to pay for rent in your new
city, or what you need to charge for your current
home to both cover your mortgage payments and take
care of other costs you'll entail as a landlord.
Another solution available from some brokers is the
guaranteed sale plan, which is detailed in the next
question.
What if I do have to sell my current house first?
ERA Coastal Properties offers a guaranteed-sale
plan, which is essentially a written promise to buy
your house at a pre-determined price if it doesn't
sell by a certain date. The amount of the guaranteed
price varies considerably between brokers.
If you opt for the guaranteed-sale route, look into
the
ERAŽ Sellers SecurityŽ Plan. It's a unique
guaranteed-sale plan offered in all 50 states.
You'll sleep better knowing that you are
participating in an ERA Real Estate program that has
the financial backing to fulfill the terms of the
plan. You are also entitled to some additional
benefits that are automatically included in the
program.
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Pricing
How do I price my house?
Always price your property sensibly.
It is important to be realistic about your home's
value and price it accordingly. To determine the
fair market value, a real estate professional can
supply information on comparable homes that have
sold or gone under contract in your area.
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Home Improvements for Selling
Should I fix my house up before it
goes on the market?
Unless your house is nearly new, chances are you'll
want to do some work to get it ready to market. The
type and amount of work depend largely on the price
you're asking, the time you have to sell, and the
present condition of the house.
If you're in a hurry to sell, do the "little things"
that make your house look better from the outside
and show better inside. Read on for several specific
ideas for making low-cost improvements.
What is "curb appeal," and how do I create it?
"Curb appeal" is a common real estate term for
everything prospective buyers can see from the
street that might make them want to turn in and take
a look. Improving curb appeal is critical to
generating traffic. While it does take time, it
needn't be difficult or expensive, provided you keep
two key words in mind: neat and neutral.
Neatness sells. New paint, an immaculate lawn,
picture-perfect shrubbery, a newly sealed driveway,
potted plants at the front door - put them all
together, and drive-by shoppers will probably want
to see the rest of the house.
Then, for both the inside and outside of your house,
if you're going to repaint, choose neutral colors,
and keep clutter and personal knick-knacks, photos,
etc. to a minimum. Remember, when a family looks at
a house, they're trying to paint a picture of what
it would be like as their home. You want to give
them as clean a canvas as possible.
What should I do to make the house show better?
First, make your house look as clean and spacious as
possible. Remember, people may look behind your
doors - closet and crawlspace doors, as well as
those to the bedrooms and bathrooms. So get rid of
all the clutter; rent a storage space if you need
to, hold a garage sale or call a local charity.
After you've cleaned, try to correct any cosmetic
flaws you've noticed. Paint rooms that need it,
re-grout tile walls and floors, remove or replace
any worn-out carpets. Replace dated faucets, light
fixtures, and the handles and knobs on your kitchen
drawers and cabinets if needed.
Finally, as with the outside of your house, try to
make it easy for prospective buyers to imagine your
house as their home. Clear as much from your walls,
shelves, and countertops as you can. Give your
prospects plenty of room to dream.
Use the
ERAŽ "Show & Sell" Checklist to get specific
ideas on how to make your house look its best.
Additionally, ask your real estate professional for
any company brochures or videos on the subject. Such
materials are usually free and extremely helpful to
most homeowners.
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Home Warranties
What about home warranties? Are they
available to sellers as well as buyers?
Yes they are, and they're worth investigating. It's
our belief that the ERAŽ Home Protection PlanŽ is
one of the best selling points you can add to your
house. It's easy to see why. After a buyer has
invested substantial funds in a down payment and
moving expenses, the last thing they want to worry
about is a costly home repair. With the ERAŽ Home
Protection PlanŽ, they don't have to.
The warranty offers protection for you and your
buyer, covering repair or replacement costs for
breakdowns to most major systems and built-in
appliances for up to a year after the date of
closing. In many states, there is no additional cost
to sellers who provide coverage for their buyers,
except for a small deductible if you make a claim.
And when you consider the peace of mind that comes
with knowing 24-hour emergency service is always
just a phone call away, it's hard to imagine a
better investment.
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Marketing Your Home
How do I reach the right potential
buyers?
Today, people are moving farther and more frequently
than they used to; it's not unusual for upwardly
mobile executives to relocate across the country
more than once in a year. The result is that the
pool of potential buyers for your house is much
larger and spreads far wider than ever before, and
the competition to reach them is fierce.
What's an MLS and why do I need one?
A Multiple Listing Service, or MLS, is another
resource to help ensure you reach a large number of
prospective buyers and dramatically increase the
exposure of a property.
Quite simply, it's a system under which
participating brokers agree to share commission on
the sale of houses listed by any one of them. So,
for example, if you list your house with one broker
and another broker actually sells it, they share the
commission. The advantage to you is clear; more
people have an interest in selling your house.
Over the years, the MLS concept has grown from a
strictly local sales tool into a powerful national
marketing system. That's due largely to ERA Real
Estate, whose pioneering use of the fax machine,
back in 1971, led to the development of the nation's
first interstate shared listing system.
How important is advertising?
Advertising remains an important component in the
marketing process. Today, however, this means much
more that an ad placed in the local newspaper.
Today's real estate brokers have the knowledge and
resources to market your home through an array of
proven modern methods, including TV, magazines,
radio, the Internet and direct mail in addition to
traditional print advertising. They are trained to
determine where the pool of buyers for your
particular property will most likely be found and
from that, can best determine the type of
advertising that is best for your property.
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Open House
What should I expect from an open
house?
The open house is another valuable part of the
marketing process, offering prospective buyers the
chance to view houses in a low-pressure, "browsing"
atmosphere. With that in mind, you shouldn't expect
it to generate a sale, at least not directly. What
you should look for is interest expressed and
requests for private showings made to your sales
professional in the days following the open house.
Open houses are always valuable. If many prospective
buyers attend, it shows you that the property is
attractive and saleable. If very few people show up,
it can indicate that the price is too high, and
cause you to look for ways to improve Curb appeal.
Try not to draw your own conclusions - your sales
professional will give you a full report on
open-house activity and offer a professional
assessment of its results.
Sales professionals often hold an open house for
other sales professionals shortly after a house is
listed. This event, usually held mid-week when real
estate people can give it their full attention, can
be as important to your efforts as your listing in
the local MLS. The more professionals who see your
house, the more prospects you're likely to reach.
Should I try to avoid being at home when the house is shown?
You should definitely plan to be out of the house
during any open house your sales professional has
scheduled; the same goes for first showings to
prospective buyers. People often feel uncomfortable
speaking candidly and asking questions in front of
current owners. You want them to feel as free as
possible to picture your house as their "dream
home."
Who actually sells my house - a broker or a sales professional?
Both. In legal terms, a real estate sales
professional is an individual trained and licensed
to act for other people looking to buy or sell a
piece of property. While that definition applies to
both, the broker is permitted to collect fees and/or
commission for such work. Thus, the sales
professional - with whom you have most of your
day-to-day contact - works on behalf of, and is
compensated by, the broker.
Will my sales professional be present at the closing?
If you wish. while the law does not require their
presence, both the buying agent and the selling
agent may attend the closing. Even though most of
the procedures are handled by the lenders, title
companies, and in some cases an attorney, you'll
find that your sales professional can be a valuable
source of information and counsel, especially if any
last-minute problems arise.
Good sales professionals are also extremely helpful
in the days immediately prior to the closing.
They'll help you prepare by giving you a
step-by-step preview of the entire process and what
will be expected of you. And they'll make certain
you bring all necessary documents and other
information.
Click here for some helpful tools:
Five
Days to a Smooth Closing
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Six Moving Tips
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Working with a Real Estate
Professional
What makes a sales professional
effective?
We believe good training and experience make the
best sales professionals. But the truth is, not
every sales professional is right for every seller.
That's why we suggest that you follow this simple
formula to help you decide whether a particular
sales professional will work well for you.
COMPETENCE + COMFORT = CONFIDENCE
Competence: When you first meet with a real estate
professional, they'll do their best to show you that
they have what it takes to sell your house. You can
expect to see a portfolio of credentials, past
achievements, sales volume and letters of
recommendation. Look for evidence that their
background is relevant to your needs. The sales
professional you choose should also be up-to-date on
the current pool of potential buyers for houses like
yours; professionals can stay informed of this
through real estate company Web sites, such as
ERA.com, and industry networking.
Comfort: The importance of being comfortable with your sales
professional as a person cannot be overstated.
You're going to be dealing with this individual on a
regular basis, maybe for months, during a time that
can be emotionally trying for you and your family.
It takes a unique combination of these two
characteristics - competence and comfort - to
inspire the confidence a homeowner needs to maintain
peace of mind through the process of selling a
house. It's something for which every ERAŽ sales
professional strives. Always There For YouŽ is more
than a tagline. It's our way of doing business.
How do I find the sales professional who's right for me?
A good place to start is by talking to friends,
neighbors, and relatives - anyone whose
recommendation you trust. You can also try
responding to sales professionals' local
advertising, direct mail, or Web site profiles. If
they have the resources and initiative to maintain
such a presence in your marketplace, it's a good
sign that they may have the sales skill you're
looking for.
Do I have to pay a commission even if I find the buyer?
That depends on the type of listing you agree to. If
you sign an exclusive agency contract, you may sell
the house on your own without paying a commission.
In an exclusive right-to-sell agreement, you owe a
commission even if you find the buyer. Which type
you choose may largely depend on which sales
professional you work with and how much trust you
place in his or her abilities (as well as how much
time and expertise you feel you have to devote to
finding a buyer and negotiating a contract on your
own.)
What is the advantage of an exclusive right-to-sell?
Incentive - it lets sales professionals know that
their time and effort will not go unrewarded. That's
one reason the great majority of residential
listings are marketed under exclusive right-to-sell
agreements.
What if my sales professional doesn't produce?
Besides commission, the most important matter you
negotiate at the time of listing your house with a
broker is the duration of the listing contract.
Terms vary, but listing agreements are seldom for
less than three months or greater than one year.
But what if you find yourself dissatisfied midway
through a nine-month contract? While the listing
contract is legally binding, some brokers offer
homeowners an "out" if they are unhappy with the
services they are receiving.
Why list my house with an ERA Broker?
Exclusive services that can make selling your house
faster and easier, and unparalleled expertise in
local and national markets - those are two of the
most important reasons why no one can sell your
house more effectively than an ERAŽ professional.
Beyond that, we're sincerely interested in helping
make the experience of selling your home as smooth
and easy as possible. So even if you're not ready to
list your house - if you simply have questions about
the market in your area, price or mortgage trends,
or anything else about real estate as it relates to
you - just pick up your phone and call ERAŽ Coastal
Properties today at (252) 261-0606. As our tagline
states, we're Always There For YouŽ.
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